Page 14 - MCS August Day 2 Suggested Solutions

CIMA AUGUST 2018 – MANAGEMENT CASE STUDY

Avoid (high likelihood/high impact). Where a risk falls into this category, we must consider
avoiding the activity altogether. This may involve for example, using equipment that has not been
tested correctly or purchasing inferior glass for the production of cost saving on lens production.
It is important to note that the management of risk is a continuous process and Montel must have
regular reviews of the risks documented in the risk register. It is important that Montel also
considers uncertainty during production through contingency planning, detailing plans of action
dependent on the possible risks that may be identified which are specific to that particular
product and situation.

Change management issues associated with the introduction of these new processes are likely to
focus on people issues with new leaders created, skills and capabilities developed and perhaps
even jobs changed. This may particularly be relevant if it is deemed important to create a new
function or department. It is recommended that a business case for any new function/department
be prepared, with specific examples of risks that have occurred in the industry identified to
support this new initiative.

Change is unsettling and the leadership of the board is important. It is fortunate that the newest
non‐executive director does appear to consider the new department to be of value to Montel. In
order to motivate the board to make full use of the department’s output it is important that the
CEO demonstrates this support.

If a new function or department proves necessary it must have very clearly agreed objectives
which must be in line with those of the core business. These objectives must be supported by
formal documentation clearly setting out their rights, powers and reporting lines to ensure that
their output can be monitored and that their ideas are adopted providing they comply with the
overall strategic objectives of Montel. This is particularly important in the area of risk
management given the significant effect that failure to achieve reliable, high quality, innovative
and customer focussed range of cameras and lenses may have on profitability and reputation.

The function/department should be staffed with appropriately skilled personnel and be very
clearly seen to be supported by senior management in order to highlight its importance. The
Board must be seen to back this approach and also be seen to support the function/department’s
output. A chain of command should be set up so that findings are reported to the correct person
who is sufficiently senior to ensure that recommendations are considered and options for future
risk mitigation strategies evaluated.

Montel could have a newsletter for internal circulation where issues such as recent technological
development/changes are highlighted which could potentially have an effect on risk. Similarly
recent events where the effect of risk may not have been considered at the earliest opportunity
should form part of regular staff communication. Highlighting these events may encourage other
departments and the Board to take the new department’s findings seriously.

It is likely that the new function/department will be located centrally but they will probably need
to communicate with staff based in many other geographical regions given that Montel has four
factories in Farland and worldwide geographical coverage. It should also be made clear that the

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